The following examples of narcotics-related financial investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted. IRS Special Agents participated in the financial investigative aspect of these cases.
Cocaine Distributor Sentenced to Eight Years in Prison
On August 31, 2007, in Macon, GA, Solomon Tyrone Daniels was sentenced to 96 months in prison, to be followed by five years of supervised release. Daniels pleaded guilty on September 20, 2006, to the offenses of operating an unlicensed money transmitting business and conspiracy to possess and distribute cocaine. According to his plea agreement, Daniels, the owner of Solo Industries, Inc., in Ashburn, GA, admitted that he paid individuals to transport illegal drugs and illegal drug proceeds throughout Georgia and Florida. As part of the plea agreement, Daniels agreed to forfeit $135,308 in cash which represented proceeds from the sale of cocaine.
“Hit Man” Sentenced to 30 Years in Prison after Pleading Guilty to Racketeering and Murder Charges
On August 24, 2007, in Baltimore, MD, Eric Hall was sentenced to 30 years in prison, followed by 15 years of supervised release after pleading guilty to participating in a racketeering conspiracy, racketeering and use of a firearm to commit murder in furtherance of drug-trafficking. According to the plea agreement, Hall was a member of the Rice narcotics-trafficking organization which was responsible for the distribution of cocaine and heroin in northwest Baltimore City. The Rice Organization preserved its power, territory and profits and retaliated against rival drug organizations through the use of intimidation, violence and threats of violence. Hall participated in the Rice Organization’s racketeering enterprise by committing multiple acts of violence, including murder, attempted murder and participating in the conspiracy to murder another man. Those acts were in retaliation for the 1996 abduction of Howard and Raeshio Rice’s mother. Hall was indicted in February 2005, along with brothers Howard and Raeshio Rice and 10 other defendants, all of whom have now pleaded guilty to racketeering or drug conspiracy charges. Howard and Raeshio Rice, the leaders of the organization were sentenced to 30 years and 27 years in federal prison, respectively.
Virginia Man Sentenced for His Role in Marijuana Distribution Ring
On August 17, 2007 in Alexandria, VA, Morey Wright was sentenced to 135 months in prison, followed by five years of supervised release for conspiracy to distribute 1,000 kilograms or more of marijuana and money laundering. According to the indictment, Wright and his co-conspirators brought marijuana from Texas, California and Arizona to Virginia, Maryland, Pennsylvania and New York. They recruited and hired couriers, long-haul truck drivers and shippers to transport the money and marijuana. Wright deposited the proceeds of the illegal activity into bank accounts and placed the proceeds in the names of other individuals and entities to hide the unlawful activity and the nature, location, source, ownership and control of those funds. He used the drug trafficking proceeds to pay for living expenses and to buy real estate in Florida, Jamaica and elsewhere.
Fugitive Sentenced to Over 6 Years in Prison for Money Laundering and Drug Charges
On August 16, 2007, in San Francisco, CA, Mario Azcarate was sentenced to 78 months in prison for money laundering and possession with intent to distribute cocaine. Azcarate pleaded guilty on April 26, 2007. According to court documents, in 1991, at his home in San Anselmo, California, Azcarate knowingly possessed more that 500 grams of cocaine with the intent to deliver it to other people. He also used the proceeds from the sale of cocaine to make a mortgage payment on his home. In August 1992, Azcarate fled the United States to avoid cocaine possession charges filed against him by the state of California. In 2003, he was arrested and charged with money laundering in the United Kingdom. He later was convicted on that charge. In 2006 he was extradited to the United States.
Texas Man Sentenced to 11 Years for Selling Drugs
On July 25, 2007, in Waco, Texas, LeJohn Martin, of DeSoto was sentenced to 135 months in prison followed by 60 months of supervised release for money laundering and possession and distribution of marijuana. Martin, also known as “Big John”, pleaded guilty to the charges on April 17, 2007. Martin used his profits from the sale of marijuana to buy vehicles and real estate. To hide the true ownership of the assets, he placed the property in nominee names. He also started a trucking business known as “Above and Beyond Trucking”. Martin has forfeited $275,000 in cash as well as personal and real property involved in his drug trade.
New Hampshire Man Sentenced for Marijuana Conspiracy
On July 31, 2007, in Concord, NH, Stephen Hart was sentenced to 72 months in prison followed by four years of supervised release for engaging in a conspiracy to distribute in excess of 100 kilograms of marijuana and for engaging in a monetary transaction with proceeds from the distribution of marijuana. From January 2006 through June 2006, law enforcement officials using a cooperating individual, arranged to sell 138 pounds of marijuana to Hart. Before the transaction took place, Hart was arrested. During a search of his residence, approximately 20 pounds of marijuana was seized along with $45,000 in cash, extensive drug ledgers, and firearms. Also seized during the course of the search were records establishing the purchase of assets with the proceeds of Hart’s marijuana distribution activities.
Defendant Sentenced to Six Years in Prison for Drug Trafficking and Money Laundering
On July 13, 2007, in Seattle, WA, Joshua Macke was sentenced to 60 months in prison to be followed by three years of supervised release for conspiracy to engage in money laundering and conspiracy to distribute marijuana. As part of his plea agreement on March 24, 2007, Macke agreed to forfeit to the government three late model vehicles, nearly $1 million in currency and investments, and his home. According to court documents, Macke distributed pound quantities of B.C. Bud marijuana which was being transported into Washington State from Canada. Macke laundered the proceeds of his drug activity by using cash to invest in real estate and in one instance, a fledgling business. Specifically, between June 2003 and February 2005, Macke invested more than $100,000 in cash in a flat screen TV company called Flat TV USA. However, no records of the investment were ever created. Later he delivered more than $500,000 to a mortgage broker for real estate investments. Some of that money was transferred to real estate lawyer Joel Manalang, who was sentence in November 2006 to 18 months in prison on money laundering charges.
North Reading Man Sentenced To 12 ½ Years on Federal Drug, Money Laundering and Tax Evasion Charges
On July 11, 2007, in Boston, MA, Sean P. Bucci was sentenced to 151 months in prison following his conviction of conspiracy to possess with intent to distribute marijuana, money laundering, structuring financial transactions and tax evasion. Bucci, founder of “whosarat.com,” was convicted following a jury trial earlier this year. He sold thousands of pounds of marijuana out of his home in North Reading, MA and laundered hundreds of thousands of dollars through various bank accounts. Trial evidence showed that Bucci used his drug money to buy real estate, vehicles, a boat and for gambling trips to Aruba. The jury also returned a $2.7 million judgment of forfeiture against Bucci.
Missouri Man Sentenced to Prison for Large Drug Trafficking Conspiracy – Forfeits Real Estate, Luxury Vehicles, Expensive Jewelry and Nearly $400,000 in Cash
On July 3, 2007, in St. Louis, MO, Boyd Houston, III was sentenced to 144 months in prison on conspiracy and money laundering charges in connection with the distribution of cocaine and marijuana. Houston also forfeited $600,000 in property, including $400,000 cash. Houston received marijuana and cocaine from Texas and Arizona which he then distributed in the St. Louis area. Houston shipped cash to an associate in Texas, using FedEx and other delivery services. The cocaine was delivered by couriers from Texas to the St. Louis area. Houston deposited proceeds of his drug trafficking in various financial institutions for the purpose of concealing the true nature of the source of the deposits and used the proceeds to purchase many luxury items as well as real estate.
Cocaine Distributor Sentenced to 180 Months in Prison on Drug and Money Laundering Charges
On June 27, 2007, in Memphis, TN, Willie Andra Woods was sentenced to 180 months in prison on drug and money laundering charges. As alleged in the information to which Woods pleaded guilty in December 2006, the money laundering charges concerned transactions involving a band account in the name of Aftermath Entertainment Associates, Inc., a corporation controlled by Woods. As explained in the government’s motion filed in connection with the sentencing of Woods, Woods admitted in a written confession that he had been distributing "somewhere around 100 to 125 kilos [of cocaine] a month." The prosecution of Woods and his distribution network has been one of the largest drug cases brought in the Western District of Tennessee in recent years. The arrest of Woods resulted in the seizure of, among other things, numerous vehicles and a bank account associated with Woods with a balance of approximately $334,786.
Ecstacy Trafficker Sentenced to Seven Years in Federal Prison
On June 21, 2007, in New Haven, CT, Christopher Barnes was sentenced to 84 months in prison, three years of supervised release and ordered to pay a $2,500 fine. On August 30, 2006, Barnes pleaded guilty to two counts of distributing MDMA (more commonly known as “ecstacy”) and one count of laundering money. At the time of Barnes’ arrest, agents seized more than 25,000 ecstacy pills and discovered a variety of contraband, including 20 firearms, many of which were semi-automatic handguns or semi-automatic rifles. Authorities also found more than 16 boxes of ammunition, a scope and a firearms silencer. Agents seized more than $7,000 in cash and four vehicles. Barnes admitted that he used money from the sale of ecstacy to buy a house.
Couple Sentenced to Over 19 Years in Prison for Laundering Millions in Drug Money
On June 8, 2007, in Atlanta, GA, Hoang Nguyen and Terri Nguyen were sentenced for laundering in excess of $15 million in drug money. Specifically, Hoang was sentenced to 235 months in prison, to be followed by two years of supervised release; Terri Nguyen was sentenced 41 months in prison, to be followed by two years of supervised release. According to court documents, the investigation established the existence of an extensive money laundering operation, both in Atlanta and in Canada that used domestic and international financial institutions to try to legitimize the illicit funds. Information presented in court stated that in early 2002, as part of an ecstasy investigation in Toronto, Canada, Canadian officials intercepted calls to a group of people who laundered money for numerous drug organizations in Canada and the United States. Through the money laundering investigation, Canadian authorities determined that drug money was being laundered through an extensive network of business entities, couriers and money remitters within Canada and the United States. The extensive money laundering organization centered in Atlanta used businesses in the Asian community to transfer large sums of illicit cash out of the United States. The organization was broken down into what Hoang Nguyen referred to as “the drug side” and the “money side.” The “money side” was composed of older individuals who had established business contacts in the Asian community so that the vast amount of money Hoang and Terri Nguyen delivered to them to be laundered could be explained and would be less likely to attract the attention of law enforcement. They, in turn, were responsible for the movement of drug proceeds to places such as Vietnam, Cambodia, Dubai, Panama, Switzerland, Israel, Canada, Japan, Mexico, Singapore, Latvia and the United States. When federal agents arrested Hoang and Terri Nguyen in March 2004, agents seized approximately $2.5 million in cash, real estate and vehicles, all of which have been forfeited to the United States. The evidence showed a total of approximately $15 million dollars in laundered drug proceeds were attributed to Hoang and Terri Nguyen between January 2003 and March 2004.
Life Sentence for Major Drug Trafficker Connected to the Black Mafia Family (BMF); Four Others Also Sentenced
On April 18, 2007, in Columbia, SC, five defendants were sentenced for their roles in a major, multi-state drug trafficking enterprise that resulted in one of the largest and most complicated drug prosecutions. Tremayne Graham was sentenced to life in prison without the possibility of parole. Jerry Davis, Scott King, Tiffany Gloster, and Eric Rivera were sentenced to terms of imprisonment ranging from 39 years, 10 months to 2 years in federal prison without the possibility of parole. Testimony at the guilty plea and sentencing hearings established that Davis was the head of the “Sin City Mafia,” a major criminal enterprise with headquarters in Columbus, GA; Atlanta, GA; and Los Angeles, CA. Davis’ organization had ties to the Black Mafia Family (BMF), a criminal enterprise operating in Detroit, Atlanta, Orlando, and elsewhere. All of the defendants entered guilty pleas to drug and/or money laundering charges. As part of their plea agreements, Graham, King, and Rivera agreed to cooperate with the government. While King and Rivera complied with their plea agreements, Graham lied about a number of his associates. The Judge ruled that Graham had made numerous false statements to government agents after his guilty plea and had breached his plea agreement. The Judge also ruled that Graham had threatened a witness during the course of the proceedings, and sentenced Graham to a term of life imprisonment without the possibility of parole. In addition to prison time, the defendants were also ordered to forfeiture millions of dollars in drug related assets. This case was worked as part of the Organized Crime and Drug Enforcement Task Force (OCDETF) program.
Drug Trafficking, Money Laundering Conspiracy Nets Life Sentence
On May 1, 2007, in Kansas City, KS, Dheadry Lloyd Powell, of Parsons, Kansas, was sentenced to life in federal prison on drug trafficking and money laundering charges. In August 2005, Powell pleaded guilty to conspiracy to distribute or possess with intent to distribute more than 50 grams of crack cocaine and conspiracy to commit money laundering. As Powell obtained cash from the sale of crack cocaine, he exchanged the smaller bills for $100 bills. He convinced family members and others to conduct the exchanges for him at various financial institutions. He also provided money to family members to buy vehicles that were titled in their names to hide the fact he was the owner. Investigators estimate he laundered $99,673 in drug trafficking proceeds. Powell also forfeited to the government all proceeds from the crime, including a $150,000 judgment, cash, vehicles and other goods
Iowa Drug Ring Leader Sentenced to 31 Years in Prison
On May 2, 2007, in Sioux City, IA, Ryan Keith Mathison was sentenced to 31 years in prison for continuing criminal enterprise, conspiracy to distribute controlled substances, money laundering and four counts of filing false tax returns. Mathison was convicted in November 2006 for his involvement in a drug ring that smuggled controlled substances from Mexico. He failed to disclose on his 2001 – 2003 federal tax returns the income he made while engaged in illegal drug trafficking.
Bronx Woman Sentenced in Drug and Money Laundering Case
On April 27, 2007 in New York, NY, Nancy Pena was sentenced to 10 years in prison and ordered to forfeit $125,000 for money laundering. Pena owns Valoy Express Multiservice, Inc., a Bronx, New York money remitting business. Pena pleaded guilty in October 2006 to using her business to transfer the proceeds of narcotics transactions in order to launder the money. On two occasions in 2005, Pena met with an undercover law enforcement agent and accepted $125,000 in narcotics proceeds to transfer to a bank account purported to be under the control of a narcotics trafficking organization. Pena was also part of a conspiracy with others to distribute cocaine.
Leader of Vineland Boys Gang Gets Life Imprisonment for Racketeering and Drug Trafficking Offenses
On April 23, 2007, in Los Angeles, CA, Rafael Yepiz, the leader of a San Fernando Valley gang called the Vineland Boys, was sentenced to life without parole in federal prison for his convictions on federal racketeering, drug trafficking and money laundering offenses. According to court documents, the Vineland Boys gang, which was a powerful street gang with cliques operating in parts of Burbank, North Hollywood, Sun Valley and Palmdale. The gang had an extensive drug-trafficking network, which distributed cocaine, methamphetamine and marijuana throughout the Los Angeles area, as well as in Hawaii, Indiana and the east coast. In addition to the sale of narcotics, the indictment charged 39 defendants with violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. This case is the product of an investigation by the High Intensity Drug Trafficking Area Task Force (HIDTA), which is made up of agents and officers from several agencies, including the Drug Enforcement Administration, the Los Angeles Police Department and the Internal Revenue Service-Criminal Investigation. The Burbank Police Department and the Glendale Police Department also participated in the investigation.
San Jose Man Sentenced to 17 Years in Drug Trafficking Scheme
On March 14, 2007, in San Jose, CA, Michael Costa was sentenced to 17 years in prison for his role in directing a cross-country, 1,000 kilogram marijuana distribution conspiracy involving the use of firearms, violence, and money laundering to execute the drug trafficking scheme. Costa pleaded guilty on June 21, 2006 to conspiracy to distribute and possess with intent to distribute marijuana, use of a firearm in connection with a drug trafficking crime, interstate travel in aid of a racketeering enterprise and conspiracy to commit money laundering. Costa was indicted by a federal grand jury on April 23, 2002. He was charged with conspiracy to possess marijuana and cocaine with intent to distribute, use of a firearm in connection with a drug trafficking crime, kidnapping, and money laundering crimes.
Springfield, Missouri Business CEO Sentenced in Meth-Related Conspiracy
On March 8, 2007, in Kansas City, MO, Roy James Hudspeth, of Springfield, MO, was sentenced to 20 years in prison for money laundering. Hudspeth was the vice president and CEO of Handi-Rak, a convenience store product distributor. The case was a result of Operation Ice Palace, a long-term investigation into the illegal sale of large quantities of over-the-counter cold medications to methamphetamine manufacturers in southwest Missouri. Operation Ice Palace resulted in a series of indictments against 53 defendants. Co-defendants in the case included a Handi-Rak sales manager and four sales agents of the wholesale company, as well as the owners and employees of several convenience stores. A jury found Hudspeth guilty for his part in distributing pseudoephedrine, knowing that it would be used to manufacture methamphetamine.
New York Man Sentenced to 10 Years in Prison in Multi-State Drug Trafficking Scheme
On February 21, 2007, in Greenbelt, MD, Edward Barber, of the Bronx, NY, was sentenced 10 years in prison, ordered to pay a $35,000 fine, followed by five years of supervised release for conspiracy to distribute at least five kilograms of cocaine. Barber and Luis Mangual, Jr. were involved in a large drug trafficking enterprise operating in Maryland, the District of Columbia, New York and elsewhere. Barber used couriers to deliver cocaine to Mangual in Maryland and Washington, DC. On May 8, 2004, Barber attempted to transport $43,000 in drug proceeds from Maryland to New York. Agents seized the funds from Barber's vehicle while it was parked in a Baltimore parking garage. Barber was one of 30 defendants convicted in this multistate drug trafficking scheme. According to evidence presented during the trials and guilty pleas of the other 29 defendants, the conspiracy lasted from January 1997 to June 2004. Luis Mangual, Jr., of Washington, DC, was previously sentenced to life in prison.
Texas Man Receives Over 12 Year Sentence for Drug Trafficking, Money Laundering
On February 17, 2007, in Beaumont, TX, Kenneth Earl McBryde was sentenced to 150 months in prison for drug trafficking and money laundering. A multi-state investigation into the distribution of cocaine and "ice"-style methamphetamine resulted in tracing McBryde's narcotics trafficking activities from Southeast Texas to sources in California. In June 2006, a federal grand jury returned a 12-count indictment charging McBryde and five co-defendants with federal drug trafficking charges. McBryde pleaded guilty to charges of distribution of cocaine and money laundering. Because he used businesses financial accounts to hide $123,150 in drug trafficking proceeds, McBryde was ordered to forfeit the money to the government.
Florida Labor Camp Owner Sentenced on Federal Charges
On January 26, 2007, in Jacksonville, FL, Ronald Robert Evans, Sr., was sentenced to 30 years in prison on numerous federal charges in 50 counts of structuring cash transactions to avoid financial reporting requirements; running a criminal enterprise that distributed crack cocaine; conspiracy to distribute crack cocaine; trafficking in untaxed contraband cigarettes; violating the Clean Water Act, violating the Migrant and Seasonal Farm Worker Protection Act; and witness tampering. Evans and his wife, Jequita Dumbar Evans, were convicted by a trial jury on August 26, 2006. Evidence presented at trial showed that Evans, Sr. owned and, with his co-defendants, operated two labor camps for migrant and seasonal agricultural workers. The defendants charged the laborers $50 per week for room and board, and put them to work in the fields for wages at or near minimum wage. At the end of every weekday, after dinner, the defendants gave the workers the opportunity to purchase on credit and at inflated prices, crack cocaine and untaxed generic-quality beer and cigarettes at a "company store" operating at the camp. Records were kept of the laborers’ "purchases," and the defendants deducted the purchases from the laborers’ weekly pay envelopes. "Advances" of crack cocaine were also available on payday in the workers' pay envelopes. The evidence at trial showed that after making the deductions for the crack, beer, and cigarettes, the Evanses were paying the workers on average about 30 cents on the dollar. The defendants obtained the money by cashing checks written by their farmer clients. Because federal law requires large cash transactions to be reported by financial institutions, the defendants instructed the farmers to structure the payments in amounts less than $10,000 to evade the reporting requirements. After Evans, Sr. was indicted, he obstructed justice by persuading one farmer to lie on his behalf to investigating IRS agents and to deny that the structuring took place. Jequita Evans was found guilty on charges of conspiracy to distribute crack cocaine and 48 counts of structuring cash transactions to avoid financial reporting requirements. Her sentencing is scheduled for February 2007.
Cocaine Trafficker Sentenced to Five Years
On January 23, 2007, in Las Vegas, NV, Manuel Martinez, Jr., the leader of a local cocaine distribution ring, was sentenced to 60 months in prison, to be followed by four years of supervised release, for conspiracy to distribute cocaine and conspiracy to launder monetary instruments. Martinez pleaded guilty in October 2006 and admitted that from about January 24, 2003 to March 2, 2005, he conspired with others to possess with the intent to distribute 500 grams or more of cocaine and to conceal and disguise the source of funds earned from the drug trafficking operation. As part of his plea, Martinez, Jr. consented to the forfeiture of approximately $1.1 million, to include six homes, and currency in several bank accounts in the names of the defendant and his mother Nayda Pesqueira, and Rodriguez Furniture and Manny’s Leather. Other defendants convicted in the conspiracy are Hiram Martinez (pleaded guilty and is awaiting sentencing); Luis Melendez (sentenced to 21 months in prison on November 17, 2006); Vincente Saucedo (sentenced to 37 months in prison on January 4, 2007); Isabel Quinones (pleaded guilty and is awaiting sentencing); Mireya Hernandez (sentenced to five years of probation on January 19, 2007); Diane Polo (sentenced to three years of probation on December 8, 2006); Eliseo Melendez (sentenced to 57 months in prison on November 20, 2006); Anthony D’Anna (sentenced to 33 months in prison on December 29, 2006); Nayda Pesqueira (sentenced to three years probation on January 4, 2007); and Karla Cota (sentenced to five years of probation on January 19, 2007).
Leader of Shotgun Crips Sentenced to Nine Years for Money Laundering
On January 18, 2007, in Minneapolis, MN, Lemarc John Harrell, a leader of a violent street gang, was sentenced to 108 months after pleading guilty to money laundering charges. According to court documents, between 2000 and 2006, Harrell conspired with others and conducted financial transactions involving money from cocaine sales. Harrell admitted that he and others bought real estate to help hide those proceeds. Harrell’s property has been forfeited to the United States, as well as $11,405 in cash and other big ticket items, including: a 2005 Land Rover, diamond earrings, a diamond tennis necklace, a diamond pendant, a 14 karat gold chain, a Jacob & Co. watch, a Corum watch, and a Duby & Schalden watch. The jewelry was worth about $250,000. Harrell admitted the property was subject to forfeiture because it was involved in, traceable to, or purchased with drug money.
Co-Leader of Rice Drug Gang Sentenced to 27 Years in Prison for Racketeering and Drug Conspiracy Charges
On January 8, 2007, in Baltimore, MD, Raeshio Rice was sentenced to 27 years in prison followed by 10 years of supervised release for racketeering conspiracy and drug conspiracy charges arising from his operation, along with his brother Howard Rice, of a large narcotics trafficking enterprise in Baltimore over a 10 year period. The Rice brothers were charged along with 11 others in an indictment filed in February 2005 with racketeering, racketeering conspiracy, drug conspiracy, several acts of violence and other offenses relating to the operation of their narcotics trafficking enterprise. According to the statement of facts from 1995 through 2004, the Rice brothers conspired with others to operate a racketeering enterprise (the “Rice Organization”) responsible for the distribution of large quantities of cocaine and heroin in Northwest Baltimore city, as well as multiple contract murders. The Rice brothers admitted that their organization was responsible for the distribution of more than 150 kilograms of cocaine and more than 30 kilograms of heroin in the Baltimore area. The Rice brothers used the proceeds of their drug transactions to purchase property, jewelry, a Sea Ray boat, luxury automobiles and several motorcycles, which were forfeited or which they agreed to forfeit as part of their plea agreements. Of 13 defendants charged, 12 pleaded guilty to racketeering or drug conspiracy charges, including Howard Rice who pleaded guilty to racketeering, racketeering conspiracy and conspiracy to distribute heroin and was sentenced to 30 years in federal prison followed by 10 years of supervised release.
Ohio Drug Dealer Sentenced to 22 Year Prison Term
On December 18, 2006, in Dayton, OH, Earl Marshall was sentenced to 264 months in prison, followed by three years of supervised release and fined $100,000 for his role in a major narcotics distribution ring. Marshall was sentenced on charges of conspiracy to commit money laundering, money laundering, conspiracy to distribute cocaine and marijuana, conspiracy to commit wire fraud and operating a continuing criminal enterprise (CCE). Marshall used money from his drug operation to buy real property, including a motor coach home. The indictment alleged that he and others bought and sold businesses, residences and vehicles to launder the drug money. In making the purchases, he recruited “straw purchasers” in efforts to disguise that money used to acquire the assets was obtained from drug trafficking.
Drug Dealer Sentenced on Tax and Drug Charges; Failed to Report Over $714,000 of Income
On December 6, 2006, in Bowling Green, KY, James Michael Chestnut was sentenced to 60 months in prison, five years of supervised release, and ordered to forfeit $50,000 in cash. Chestnut pleaded guilty in August 2006 and admitted that he willfully filed false income tax returns by failing to report his receipt of approximately $714,639 during calendar years 1998 through 2000. The unreported income came from various sources, including monies received from selling marijuana and cocaine.
Boston Man Sentenced On Federal Drug Charges
On November 30, 2006, in Boston, MA, Jeffrey McCreary was sentenced to 40 months in prison, followed by 3 years of supervised release following his guilty plea on September 6, 2006, to one count of conspiracy to distribute marijuana and two counts of money laundering. Had the case proceeded to trial, the government's evidence would have shown that the charges arose out of a DEA investigation in which agents used a cooperating witness to recover payments of nearly $500,000 from McCreary for past shipments of hundreds of pounds of marijuana in 2005. The investigation revealed a connection to the source of supply in Mexico who is facing charges in Arizona. The shipments of marijuana delivered to McCreary were shipped in tractor trailer trucks that were loaded in Arizona. A search of McCreary’s residence revealed marijuana, $66,000 in cash, and financial records. McCreary admitted to agents that he sold marijuana for 12 years and used the drug proceeds to purchase the residence and a vacation property in Maine. The drug proceeds used to purchase the properties, consisting of $111,000 was forfeited to the government as a part of the sentence.
Real Estate Attorney Sentenced for Laundering Drug Money
On November 3, 2006, in Seattle, WA, Joel Manalang, a real estate attorney, was sentenced to 18 months in prison, two years of supervised release and ordered to pay a $6,000 fine for money laundering. Manalang, a real estate attorney, operated an escrow business. Court papers allege that during 2003 and 2005, Manalang received large quantities of cash from clients under circumstances indicating to Manalang that the money was derived from drug trafficking. Manalang received the money in shoe boxes and duffle bags and assisted drug traffickers in the acquisition of real estate. On August 1, 2006, Manalang pleaded guilty and acknowledged that he knew the funds were derived from criminal activity. Additionally, he admitted that his actions were intended to conceal the true nature of the funds and from whom they were obtained. He also admitted to evading currency reporting requirements imposed by law. Manalang is one of four attorneys in the past year to plead guilty to financial crimes in connection to drug trafficking. James L. White, an attorney and Municipal Court Judge, was sentenced in December 2005, to 18 months in prison for money laundering. In a related case, A. Mark Vanderveen, an attorney, was sentenced to three months in prison and three months of home confinement for failing to file a currency transaction report as required by Federal law. Stephen J. Plowman pleaded guilty last month to failing to report cash transactions in excess of $10,000. He will be sentenced in January 2007.
Guns and Drugs Net Little Rock Man 21 Years in Prison without Parole
October 31, 2006, in Little Rock, AR, Barry Allen Weatherford was sentenced to 252 months in prison without parole for conspiracy to launder drug proceeds, conspiracy to distribute more than 1000 kilograms of marijuana, conspiracy to distribute more than 5 kilograms of cocaine hydrochloride and discharging a firearm during a drug trafficking crime. During the sentencing proceedings, Weatherford was assessed responsibility as a leader of an extensive criminal enterprise which resulted in an enhanced sentence. In addition to prison time, Weatherford was ordered to forfeit his interest in Art’s Liquor in Little Rock, the site of a drug debt kidnapping involving co-defendants Jose Enrique Mendiola, Chris Alexander, and Marcos Antonio Ponce. Co-defendants Mendiola, Alexander, Ponce, Daniel Jiminez, and Mark Fouts have already been sentenced for their roles in this case. Six remaining defendants charged in this case are scheduled to go on trial in March 2007. Weatherford also agreed to forfeit his interest in a Pulaski County, Arkansas property used to facilitate the drug trafficking activities in this case.
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